Correlation Between LiveOne and Cable One
Can any of the company-specific risk be diversified away by investing in both LiveOne and Cable One at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LiveOne and Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LiveOne and Cable One, you can compare the effects of market volatilities on LiveOne and Cable One and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in LiveOne with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiveOne and Cable One.
Diversification Opportunities for LiveOne and Cable One
Excellent diversification
The 3 months correlation between LiveOne and Cable is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding LiveOne and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and LiveOne is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on LiveOne are associated (or correlated) with Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of LiveOne i.e., LiveOne and Cable One go up and down completely randomly.
Pair Corralation between LiveOne and Cable One
Considering the 90-day investment horizon LiveOne is expected to generate 2.17 times more return on investment than Cable One. However, LiveOne is 2.17 times more volatile than Cable One. It trades about 0.0 of its potential returns per unit of risk. Cable One is currently generating about -0.38 per unit of risk. If you would invest 119.00 in LiveOne on November 9, 2024 and sell it today you would lose (5.00) from holding LiveOne or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LiveOne vs. Cable One
Performance |
| Timeline |
| LiveOne |
| Cable One |
LiveOne and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiveOne and Cable One
The main advantage of trading using opposite LiveOne and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiveOne position performs unexpectedly, Cable One can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cable One will offset losses from the drop in Cable One's long position.| LiveOne vs. Reading International B | LiveOne vs. Marcus | LiveOne vs. Reading International | LiveOne vs. News Corp B |
| Cable One vs. Liberty Broadband Srs | Cable One vs. Liberty Broadband Corp | Cable One vs. Telkom Indonesia Tbk | Cable One vs. Liberty Global PLC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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